easy · Certified Financial Planner Professional Conduct
During a planning meeting, Mr. Chen offers to lend you $50,000 to assist with your firm's expansion into a new office space. He proposes a market interest rate and full legal documentation.
According to the Standards of Conduct, how should you respond to this offer?
- Accept the offer only if the firm's compliance officer approves the loan and the interest rate is at or above the Applicable Federal Rate.
- Decline the offer because borrowing from a client is prohibited unless the client is a family member or a lending institution.
- Accept the offer provided the conflict is disclosed in writing and Mr. Chen provides informed consent.
- Accept the offer but restrict the Chen engagement to investment advice only to avoid the appearance of a conflict in the financial plan.
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